The Treasury Department announced today that it has raised the online purchase limit on U.S. savings bonds to $10,000 in Series I bonds and $10,000 in Series EE bonds per Social Security number. The move effectively restores the maximum amount of bonds that was in effect before the government stopped selling paper bonds through banks at the end of last year.

Last week, the Bureau of the Public Debt launched a marketing campaign to remind people that paper bonds would no longer be sold after 2011, with one exception: You can still buy up to $5,000 worth of paper I Bonds (but not EE bonds) per year with your federal tax refund.

Before this year, the calendar-year purchase limit was $5,000 in I bonds and $5,000 in EE bonds in both paper and electronic formats, for a maximum purchase of $20,000 per Social Security number. With paper bonds no longer available, the purchase limit would have dropped to $10,000 — $5,000 in electronic I bonds and $5,000 in electronic EE bonds.

Treasury announced that effective today, the annual purchase limit for online bonds is $10,000 per series. “The new limit applies to Series EE and Series I savings bonds purchased through TreasuryDirect at www.treasurydirect.gov. Under the new rules, an individual can buy a maximum of $10,000 worth of electronic savings bonds of each series in a single calendar year, or a total of $20,000,” it says. (The option to buy $5,000 in paper I bonds with a tax refund increases the maximum purchase limit to $25,000.)

The effort to raise the online limits was in the works before last week’s announcement, but “we didn’t have the clearance” to do it until today, says McKayla Braden, a spokeswoman for the bureau.

Many buyers find TreasuryDirect cumbersome, especially when buying bonds as gifts for others. An electronic bond “is totally abstract and makes a terrible gift,” says “Savings Bond Advisor” author Tom Adams. “You buy the bond in your account, but the person you buy it for can’t cash it until they open a TreasuryDirect account. Then you transfer it to them.” A person must be 18 to open a TreasuryDirect account so if you buy bonds for minors, you must hold it in a separate portion of your account until they turn 18 and open an account.

Unlike paper bonds, which can be replaced if lost or stolen, if someone gains access to your TreasuryDirect account and steals your bonds, there is no guarantee the Treasury will replace them. “It’s a case-by-case basis,” Braden says. She stresses that “the security levels are very high” at TreasuryDirect. For example, if you want to change the bank account linked to your TreasuryDirect account, “we have to receive physical paperwork with certified signatures.”

Marc Prosser, founder of LearnBonds.com, says today’s announcement “is not very meaningful, as it does not change the amount of savings bonds in total or by type that an individual can purchase per year.” He predicts there will be a “massive drop in the number of Americans that purchase savings bonds this year (now that) the Treasury department has eliminated the preferred way of purchasing saving bonds — at one’s local bank.”